Hurricanes$, earthquakes$, and floods$ - the politics of disaster relief

Washington Monthly, April, 1994 by Richard Reeves

We should not provide federal funds to rebuild private property!" wrote Fred Morley of Free Union, VIrginia, to his senator, John Warner, as Congress voted to send more than $8.6 billion in emergency aid to California after the Los Angeles earthquake of January 17. "These people live in California voluntarily. Insurance was available, but many reported that they didn't buy it because of the cost. Why should this Virginian provide the insurance with my tax monies that the Californians voluntarily elected not to buy for themselves? That's wrong!... We need to rethink the whole concept of emergency aid from Washington. Just like those people living on the rivers in the Midwest, they knew the risk." Warner put the letter in the Congressional Record, noting: "We have to recognize that there are geographical areas in this country that are highly vulnerable to disaster and somehow recognize that we cannot go back to the American taxpayer time after time to rebuild the freeways, to restore the military bases, to rebuild the levees."

You got it, Virginians, there is a Santa Claus. It's you--and millions of other taxpayers who, one way or another, subsidize Californians and other folks rich enough, lucky enough, or foolish enough to live at water's edge or in the picturesque path of fire, mudslide, or tremors. The rest of us pay indirectly in the form of higher insurance premiums on safer ground or directly in the kind of emergency aid that prompted Mr. Morley's letter.

Subsidizing the lifestyles of the rich and famous, you see, is pan of living in the home of the free and the land of the brave. And perhaps part of what makes the rich different from you and me is that they are braver. They live or vacation in the most dangerous of places--in Malibu, Fire Island, and Westhampton Beach, along the coast in Florida and South Carolina, on the Great Lakes, and along the great rivers that divide the Midwest.

Those, of course, are also among the most beautiful (and most expensive) places to live in the country. I know because I make it a point to try to live as close as possible to my financial betters--usually just renting, but the view doesn't know that. Right now I live in Pacific Palisades, California, across the road from Arnold Schwarzenegger's place (with a moat separating it from the rest of the country), and down the hill from where Ronald Reagan lived before he became president.

As I write this, I am looking across the greens of the Riveria Country Club to Catalina Island, 26 miles across the sea on my right, and, to the left, the snowcap of Mount Baldy more than 50 miles away. The Palisades, by the way, are above the smog line. The height of the Palisades can, however, cause some problems. In the earthquake of last January 17, a few houses not far from me ended up below the smog line--on the Pacific Coast Highway, to be exact. I'm sure you saw the pictures.

In summers past, I rented on Dune Road in Westhampton Beach, New York, writing a book as I looked across the Atlantic. I imagined the next landfall was France, though actually it was New Jersey--which is where the house ended up, in pieces, after a hurricane in 1978.

That was also the year I moved to Pacific Palisades for the first time--on October 23, 1978. Within an hour after we settled in, we were preparing to evacuate as brushfires moved across the far ridge of our canyon, driven by winds of 50 miles an hour. I watched eight houses explode into puffs of bright gas just before the flames passed by us. My first earthquake was 69 days later--a 4.6 on the Richter scale, on January 1, 1979. I then realized something: Nature never meant for 10 million people to live in the Los Angeles basin, and nature wanted the basin back.

The fires of 1978 were, as fires always are, followed by mudslides. Without the root systems of gnarled little trees and other brush to hold the land in place, a little rain moves more earth than a fleet of John Deere tractors. For days that October, television news was dominated by movie producers and other Malibu folk telling sob stories and demanding that the government build a wall to stop the slides on the other side of Pacific Coast Highway. And the state did just that, with the help of federal emergency aid--all for a dozen rich people living on the beach.

On the other coast, 3,000 miles away, ocean storms in December of 1992 and March of last year swept away 81 homes on Fire Island, New York, which, like Westhampton Beach, is basically a long sandbar off the south shore of Long Island. Most of the Fire Island homes, which are summer houses, will be rebuilt with storm and flood insurance money by policies that cost as little as $900 a year. In the Midwest, the annual rates on homes along the Mississippi and Missouri Rivers are as low as $300 for a $185,000 home.

Obviously, no insurance company willingly would offer those kinds of rates for homes on stilts in shifting sands where neither God nor law meant for man to settle. But under the Disaster Relief Act of 1974, the federal government mandates that insurers cover those homes and at least 2.6 million others on an assigned-risk basis. In simple terms, everyone else in the country pays higher taxes and insurance premiums to protect property that is uninsurable under any rational system. The total value of those subsidized policies is a staggering $248 billion.